It is through innovation that we solve problems and lift lives, but most companies don’t have a good handle on how to innovate consistently and effectively. With that in mind, Chris Trimble, author and a professor at Dartmouth College’s Tuck School of Business, gave attendees at theCIO 100 Symposium a primer in what it takes to bring true innovation to a company.

The fundamental problem is that most organizations don’t dedicate time to innovation. In fact, IT organizations Trimble talks to think they’re doing well if they carve out 30% of their budget for new ideas and innovations. That means the vast majority of time is spent just maintaining the status quo. And that’s a best-case scenario.

Trimble laid out two common approaches to innovation and then offered a third that he says will work better.

But first, he offered a definition of innovation:

“Any project that is new to your company and has an uncertain outcome.”

That uncertain outcome is what makes many companies gun-shy about innovating; uncertainty is the enemy of what he called the “performance engine,” meaning the everyday way of doing business effectively. The performance engine isn’t a bad thing; indeed, it’s required to achieve consistent profitability. But it gets in the way when it comes to doing things differently, which is a fundamental requirement of innovation.

So, companies have come up with a couple of common models to try to innovate. The first is the idea that innovation is everybody’s job every day. This is a company that encourages its employees to pursue innovation on their own initiative. It’s a powerful idea, but there’s a “sharp physical limit,” Trimble said: time. The typical IT group has little time to pursue innovation initiatives of their own design, so innovation winds up getting squeezed into little spaces of time. “If it requires just a few people and a little bit of their spare time, it’s too big,” he said.

The second model is to treat innovation like any other business process: script it and make it routine. Automotive firms, for example, roll out new car models each year, following a well-established process for doing so, one that takes four years in many cases. It’s a powerful model through which companies can get a lot done, but it’s only good for “repeatable innovation; this year’s version of last year’s model.”

The goal, then, is to implement the third model, which starts with an idea and someone to lead it, but adds a special type of team and a special type of plan. The special team is one that is dedicated to the innovation project full-time, or nearly full-time. This requires a partnership between the special team and a shared staff that is part of the performance engine, with members of the shared staff helping out the special team on occasion. Of course, this means more work for the shared staff, which means the organization has to think about adding additional resources to the shared staff.

As for the special plan, that will vary with each innovation project because each is unique. But the idea is to mimic the way a disciplined experiment runs, as everyone learns in high school if not before. That is:

  • State a hypothesis and plan the experiment
  • Predict outcomes, documenting support logic and assumptions
  • Execute the experiment, measure results, document observations
  • Compare predictions and outcomes, assess lessons learned

The payoff for running a disciplined experiment is you learn quickly and can refine your predictions accordingly. Every initiative involves making “wild guesses,” Trimble said. The trick is to turn them into informed estimates and then reliable forecasts as soon as possible.

That process will lead you to one of the only two possible positive outcomes to an innovation project: Success, or a quick and inexpensive failure.

To learn more about how to innovate effectively, check out Trimble’s books: The Other Side of Innovation, which is a traditional business book, and How Stella Saved the Farm, which is designed to be a quick-read parable.

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